It’s now unanimous—100% of the analysts surveyed by FactSet who cover Amazon.com Inc. are now bullish.

KeyBanc Capital analyst Edward Yruma was the last holdout, until he raised his rating Friday to overweight, after being at sector weight since April 2017, citing the belief that the company is now “solving for profitability” in its retail business. He set his stock price target at $2,100, which is about 23% above current levels.

The stock
AMZN, -0.23%
surged 1.6% in afternoon trade. That lifted the e-commerce and cloud giant’s market capitalization to about $842 billion, making it the third-most valuable U.S. company.

Yruma said recent announcements indicate Amazon is now working to improve retail margins, which could drive earnings above the current consensus view. Among the announcements are Amazon’s decision to close its pop-up stores, the introduction of “Amazon Day” allows for consumer pick-up days that should improve shipment costs and the rebalancing of its merchandise assortment to reduce placement of lower-margin items.

“We see an inflection point in Amazon’s profits over the next three years driven by improving retail margin expansion coupled with the mix shift to higher margin AWS and advertising segments that combined could top $100 billion by 2022 (25% of sales) vs. $10 billion in 2015,” Yruma wrote in a note to clients.

He believes Amazon’s midmarket grocery business could also emerge as a margin tailwind. Grocery margins, which are generally low, can be improved “dramatically” if Amazon can entice customers to pick up shipments ordered online, as each retrieved order could save 75% of shipping costs, Yruma said.

In a January note following Amazon’s fourth-quarter earnings report, Yruma had reiterated his sector weight rating despite “solid” results, citing the belief the company was entering “a slower phase of growth.”

With Yruma’s upgrade, all 45 of the analysts covering Amazon have the equivalent of a “buy” rating, according to FactSet. The average price target is $2,121.61 implies a market cap of $1.04 trillion, which means Wall Street expects Amazon to become the most valuable U.S. company.

FactSet, MarketWatch

The following compares Wall Street’s views on the rest of the top 4 most valuable companies:

• Microsoft: 31 of 34 analysts are bullish, 2 are neutral and 1 is bearish. The average price target of $126.37 implies a market cap of about $970 billion.

• Apple: 21 of 40 analysts are bullish, 18 are neutral and 1 is bearish. The average price target of $180.30 implies a $850 billion market cap.

• Alphabet: 42 of 44 analysts are bullish and 2 are neutral. The average price target of $1,342.05 implies a market cap of roughly $933 billion.

Amazon’s stock has rallied 8.3% over the past 12 months, while the Nasdaq Composite Index
COMP, -0.22%
has gained 2.9%, the Dow Jones Industrial Average
DJIA, +0.14%
has advanced 4.0%, while the S&P 500 index
SPX, -0.07%
has tacked on 2.8% over the same period.

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